Taking effect this week in Chattanooga is city government’s so-called short-term vacation rental ordinance, one that is illegal on several grounds — including a new one that comes into view on a closer reading.

The ordinance is unconstitutional on several grounds. The most significant violation of law is its being arbitrary and capricious in its division among city residents into two camps. In one group are those who may participate in the free market economy in the rentals of their houses via internet platforms such as Airbnb. In the other group: Those who may not. The so-called map overlay or short-term vacation rental “district” crafted by the council is capricious because it has no rational grounds by which to separate neighbors, some who may rent out their houses in the online “Gig City” market and others who are forbidden from doing so without means of recourse.

Because it is arbitrary and capricious, it violates due process requirements of constitutionality, as sponsor Chip Henderson and backers such as Darrin Ledford were warned.

The ordinance is also unconstitutional because it pretends that people who are not corporations and not in commerce may not use their private houses and residences for their private purposes for profit, pretending that they must act in commerce and corporately when they are in fact acting privately and not in commerce, though their houses are listed at Airbnb and other such portals as being available for rental. The supreme court ruling that makes this point about private capacity is the most cited in American jurisprudence, Hale v. Henkel, 1906. (http://caselaw.findlaw.com/us-supreme-court/201/43.html)

$50 fine rule rescues the citizenry

If forced to defend its ordinance, the city will be in trouble because the ordinance violates the rule in the Tennessee constitution that forbids city governments from imposing fines past “fifty dollars.”

The constitution, at article 6, section 14, limits the power of cities to punish or fine offenders. “No fine shall be laid on any citizen of this state that shall exceed fifty dollars, unless it shall be assessed by a jury of his peers, who shall assess the fine at the time they find the fact, if they think the fine should be more than fifty dollars.”

Cities are state-chartered civil corporations that do not have authority in criminal matters, do not have capacity to call jury trials. City judicial departments that operate city courts are part of the state’s system of inferior courts, charged with enforcing ordinances and limited to fines of $50. Criminal authority and the power to punish is limited to county government and its grand jury.

Two controlling high court opinions that explain the limits of municipal power to fine (and not to punish) are City of Chattanooga v. Myers, 787 S.W.2d 921 (1990), and City of Chattanooga v. Davis, 54 S.W.3d 248, 276- 77 (2001).

‘Each day shall be a separate offense’

The ordinance respects the figure of $50, but in fact will disregard the limit. Here is the provision:

Section 38-538. Penalties.
Any violation of this Article shall be punishable by a fine of not less than twenty five dollars ($25.00) or more than fifty dollars ($50.00). Each day that the violation continues shall be a separate offense. ***.

The city council thinks it can bypass the $50 fine rule by saying the fine applies every day its victim is noncompliant. But the very language of the ordinance warns against that possibility, referring each day of violation as “a separate offense.” If that is true, each day would require a separate lawsuit, a separate civil case and a separate finding by the judge that each day is a new offense. For each day a homeowner lives out his protected liberties, the city would have to file a new case, complete with due process and notice requirements observed and proper filings in city court. Each day would require its own case for there to be a F$50 penalty each day for each “separate offense.”

Not only would that be impractical. It violates a basic courtroom rule. The doctrine of res judicata forbids such an action because the first finding of guilt and the first fine settle the matter. Res judicata says that once a matter has been decided, it cannot be relitigated. Another term for the protection of the citizenry is estoppel.

Plain and simple, the city ordinance violates the rule of res judicata. All the city can do against a “violator” is impose a single fifty dollar fine — and that’s it. The ordinance pretends to breathe fire and threats, but it is toothless and impotent. The city’s lines of legal type, as drafted by city attorney Wade Hinton, like much American positivist law, is a cancer, spreading lawless civil authority and wild ultra vires claims by a state actor against the “free people” living in the State of Tennessee.

Mr. Ledford says he appreciates my constitutional and free analysis of the ordinance but that I’m not really living in the real world. He is a pragmatist and says that no one has complained about his vote nor sufficiently appreciated an amendment. People outside the short-term-vacation-rental district are petitioning their city council person to get inside the district, he reports.

Internet prophylactic

That may be but representative government is not simply doing what people want and what city attorney’s allow. Being a part of representative government means representing and defending the Liberties in law to the people in support of a no vote on the ordinance, which is plain out unconstitutional in several parts and offensive of the liberties of people in Gig City.

The anti-AirBnB ordinance is a Beijing wall to keep out visitors and strangers and to intimidate innocent homeowners. It is a digital condom enforced by Mayor Andy Berke and his pretended economic development office, with Donna Williams charged with surveillance, screengrabbing AirBnB postings and sniping at homeowners through a broken window on the third floor of city hall.

It is retrograde, part of legacy thinking, patronizing and regressive. Pragmatists such as Messrs. Henderson and Ledford should represent the people, protecting their rights in the law as first and foremost in their thinking. They shouldn’t try to rescue zoning controls, the underlying premise of their digital barricade around Chattanooga. Leave the Internet economy alone, and let zoning authority and control be entirely bypassed as an offense against property rights.

Sources

Black’s Law Dictionary, Eighth edition

American Jurisprudence, Quieting Title and Determination of Adverse Claims

About The Author

David Tulis hosts a talk show weekdays 9 to 11 a.m. on Noogaradio 92.7 FM 95.3 FM HD4 (digital), covering local economy and free markets in Chattanooga and beyond. Support this site and his radio station in Chattanooga, on your smartphone via the TuneIn radio app or at Noogaradio.com. Noisily patronize his advertisers. Also, “buy me a coffee at the tip jar.”